An independent panel has provisionally concluded that the proposed merger between Spreadex and Sporting Index, the two largest spread betting operators in the UK, would have a detrimental impact on competition in the sector. Spreadex announced its intention to acquire Sporting Index in November, prompting concerns over the fairness of the deal. The Competition and Markets Authority (CMA) launched an assessment in February to investigate the potential effects of the merger on competition.
The investigation focused on the impact of the merger on both spread betting and fixed odds sports betting, with particular emphasis on the spread betting side due to the dominant position of Spreadex and Sporting Index in this market. The first phase of the investigation assessed the likelihood of the merger reducing competition, while the second phase delved deeper into the specific concerns raised.
After examining all available evidence, the panel determined that the merger would eliminate competition in the sector, leading to a limited range of products, higher prices, and a poorer user experience for consumers. To address these concerns, the panel is exploring potential solutions, such as requiring Spreadex to sell certain assets to facilitate the operation of a rival licensed spread betting business.
Panel chair Richard Feasey emphasized the need for sufficient divestment of assets to maintain competition in the market. The CMA is seeking feedback on its proposed remedies until August 8, as well as on its provisional findings until August 15. The final report is expected to be released by November 26.
In conclusion, the provisional findings of the independent panel suggest that the merger between Spreadex and Sporting Index could significantly harm competition in the spread betting sector. The CMA is exploring potential remedies to address these concerns and ensure that consumers continue to benefit from a competitive and diverse market. Feedback on the proposed solutions is being sought, with the final report expected to provide further clarity on the future of the merger.